RedStone is to introduce a system allowing holders of Centrifuge’s tokenised NYLIM U.S. high-yield bond fund to exit their positions within the same blockchain transaction, using off-chain auctions that last about 300 milliseconds.
The company said on 1 September that its Settle service is being integrated with the NYLIM Anemoy U.S. High Yield Corporate Bond Segregated Portfolio, which trades under the ticker HYB.
HYB is issued through Centrifuge and is the first tokenised fund sub-advised by New York Life Investment Management. NYLIM manages $838bn in assets, according to the latest figure supplied by RedStone. That is an increase from the approximately $807bn reported when the fund was launched in June.
The new arrangement is intended to allow HYB holders, lending protocols and liquidators to sell fund units in one on-chain transaction. A liquidity provider supplies the money immediately, receives the units and later completes the fund’s normal redemption process.
RedStone describes the arrangement as T+0 settlement, but the underlying HYB redemption period remains T+3. Instead of making the seller wait, Settle passes that period to an approved liquidity provider, which holds the units in return for a discount.
When a position becomes eligible for liquidation, Settle conducts an off-chain auction lasting about 300 milliseconds, RedStone co-founder and chief operating officer Marcin Kazmierczak told crypto.news.
The participants in those auctions are KYC-verified and whitelisted liquidity providers known as solvers. Each solver states the discount it requires from HYB’s reference price. The bid offering the smallest discount wins, meaning the seller receives the amount closest to the fund unit’s calculated value.
At the end of the auction, RedStone places its latest price update and the liquidation instruction into a single atomic on-chain transaction. Kazmierczak said this is intended to prevent front-running because the price update and the trade are submitted together, rather than in separate transactions.
Atomic execution also means the transaction either completes in full or is reversed. The successful solver must provide the promised capital and has a bonded deposit that can be taken away if it fails to do so, according to Kazmierczak.
The solver then submits the HYB units for redemption through the issuer’s existing T+3 process. Its compensation is the discount agreed during the auction, which reflects both the cost of providing immediate funds and the risk of waiting for redemption.
RedStone said the model does not require a large on-chain liquidity pool. Centrifuge and NYLIM would not have to provide capital for early exits, nor would they need to alter the fund’s current redemption arrangements.
The system is also aimed at lending markets. Curators need to know that collateral can be sold if a loan becomes undercollateralised. RedStone believes that a defined exit price and settlement period could help curators establish lending limits without depending on an uncertain redemption queue.
Because high-yield corporate bonds do not trade continuously in the same way as cryptocurrencies, HYB’s auction will not start with a price taken from a 24-hour spot market. Instead, RedStone’s fundamental price feed will establish the opening value using net asset value data from the fund administrator.
Solvers will then compete by naming the percentage discount they need to acquire the units and wait for redemption. The structure places the administrator’s NAV at the centre of the process, while the solver’s bid reflects the cost and risk associated with the T+3 delay.
RedStone said Settle could be used for voluntary redemptions and deleveraging as well as loan liquidations. In difficult market conditions, however, auctions would still depend on enough eligible providers having capital available.
If participation is too limited or no suitable bid is submitted, Kazmierczak said prefunded vaults would also take part in auctions. Those vaults are intended to provide backstop liquidity on-chain.
Pricing remains a major challenge for tokenised assets used as lending collateral. An August report on Stellar’s DeFi market found that its real-world asset market had grown beyond $3bn, while Blend pools capable of accepting RWAs held only slightly more than $2m.
RedStone said tokenised corporate debt requires pricing systems to consider credit quality, maturity, settlement conditions and the structure of the security. Data from a fund administrator is particularly important when the assets in a portfolio do not have a continuously traded public market.
Centrifuge and NYLIM introduced HYB in June, giving eligible investors on-chain access to NYLIM’s US high-yield corporate bond strategy. Subscriptions and redemptions are settled in USDC. NYLIM remains responsible for managing the portfolio, investment decisions and risk, while Centrifuge provides the tokenisation and fund infrastructure.
HYB units are expected to be available as collateral in markets built on Morpho, a decentralised lending protocol using isolated pools. Individual Morpho markets can set their own collateral assets, loan-to-value ratios and liquidation rules, keeping HYB’s terms separate from unrelated lending pools.
Eligible holders could therefore borrow against HYB rather than sell it, depending on the rules and available liquidity of the relevant Morpho market. RedStone said curators could use Settle’s settlement terms when deciding how much credit to offer against each unit.
Morpho’s infrastructure expanded to Tempo in May, when Gauntlet and Sentora introduced curated markets and RedStone supplied price feeds for stablecoins and tokenised real-world assets. The HYB integration brings pricing, market curation and lending together for a tokenised US corporate bond portfolio.
Access will remain permissioned because HYB transfers require approved participants. Kazmierczak said other tokenised funds could use Settle if they support KYC or business-verification whitelists, provide a reliable NAV feed and publish clear redemption terms that allow solvers to assess the waiting period.
The fund is entering a growing tokenised credit sector that includes high-yield products from several established US investment managers. In August, Securitize launched a separate fund managed with Neuberger Berman that invests mainly in high-yield bonds. RedStone said it also supplies pricing infrastructure for that strategy.
Data from RWA.xyz, cited in RedStone’s announcement, valued tokenised real-world assets at more than $38bn in August, compared with about $5.4bn at the start of 2025. Tokenised US government debt accounted for $16.2bn, while tokenised credit stood at $7.3bn.
RedStone said more than 1.7 million addresses held tokenised real-world assets in August, after a 56% monthly increase. Those wallet or blockchain addresses do not necessarily represent the same number of individual investors.
Citi has forecast that tokenised assets could reach $5.5tn by 2030. Standard Chartered has estimated a $2tn market by 2028. Both figures are institutional projections, rather than records of completed token issuances or confirmed investments.
